Easy Jet Company - Ansoff Matrix, Corporate Social Responsibility, and Macro-Environment - Report Example

ANSOFF MATRIX, CSR, AND MACRO-ENVIRONMENT Introduction Ansoff Matrix, CSR, and Macro-Environment are strategies that can be used to analyze the growth of Easy Jet Company. Easy Jet is a leading airline in Europe, operating in about six hundred routes in more than thirty countries. Corporate-level strategy The Corporate-level strategy is a technique in an organization that dictates and decides which product and service markets to compete and in what particular geographical region to operate. For Easy Jet Company, it majorly focuses on the distribution of staffs, cash, and equipment. Other activities that also fall within its domain are the need for diversification and the addition of the new products, and service lineups. Whether to have direct completion with other firms or to selectively develop strategic alliances also fall within the corporate level strategy. It answerers critical questions like the scope of operation, and how to locate some of the resources within its various departments (Foss, 2007). Ansoff Matrix Ansoff Matrix is a model framework used to explore the direction of strategic growth of a business by effectively taking control of the business environment. Thus, it evaluates at the same time identifies different business growth opportunities and advice the business management team to think of such risks in the market. This essay will be explaining the Ansoff Matrix relevance to secure business and how the markets get penetrated within the industry of Easy Jets (Jones, 2005). In general, the growth matrix majorly helps an organization to map the strategic market growth. It has four marketing strategies that are market penetration that include market penetration, product development market development and. The diagram below illustrates the marketing strategies in Ansoff Growth Matrix (Foss, 2007). Figure 1-1: The Four Strategies of Ansoff Matrix Market Penetration It is the entry of an organization into the market with its existing products and services. It is achieved by taking a portion or the whole competitors market share. It can also be achieved by attracting new customers to the service. Ensure that a larger number of current customers use the facility and for the case of Easy Jet they provided this by convincing a larger number of people to use the flight. It is almost a riskless method to expand the firm. Easy Jet tries hard to have their flights in many countries to reach various existing customers by engaging in penetration strategy. From the study, it is established that within Europe, the United Kingdom generates more air traffic than any other country within its airport. It handled about 240 million passengers in 2008 with EasyJet dominating the market as shown in figure 2. However, a closer competitor in the same market is Ryan air that is at London Stansted (Anderson, 2014). Figure 2: Flight Analysis of Summer 2009 (source OAG Max Online for w/c March 2009) Market development Market development is where a business sells or extends its services to new markets. It is achieved by further market segmentation to help identify new operational bases. This approach strategy follows distinct approaches that are: new geographical markets, new distribution channel, and new pricing or ticketing policies. Easy Jet identified new stable base in the UK taking the advantage of Londons spare Airport capacity in 1990s at two secondary airports that British Airways ignored (Anderson, 2014). Easy Jet also arrived in London’s Gatwick making Munich serve four main London airports, but Ryanair is planning to extend a branch in West Munich. Easy Jet has expanded its flights to Iceland, Morocco and Serbia where it offers very cheap flights as evident from its site. Product Development In this strategy, new products and services are introduced to the existing markets. Easy Jet is known to be UKs largest airline and the fourth largest in Europe and therefore they are keen on their corporate responsibility as it is fundamental in delivering their policies thus affecting all they do. They therefore carefully introduce their flights to other safe countries. Therefore, they plan to invest in one hundred new Airbus A320 neo aircraft. These will ensure that the organization will achieve the goal of being one of the most effective and efficient flights in Europe. The new planes will be fifteen percent efficient in terms of fuel consumption compared to planes that they are currently replacing. The organizations target is that they form 35% of the airlines by 2022. Easy Jet has therefore developed a long-term strategy for sustainable future of the industry (Jones, 2005). Diversification It is a growth strategy that involves an organization that is marketing new products and services. Among the four strategies, it is considered as the riskiest since the business isn’t aware of the development problems that might occur as a result. Business need to have their facts right regardless of what is to be gained by making a clear assessment of the risks that could be involved. Easy Jet has now developed major networks in many UK airports thus becoming the dominant carrier on short haul routes to and from UK. Figure 2 shows analysis of summer 2009 schedules revealing Easy Jet as the most dominant. It offers the largest capacity on routes from UK airports to EU destinations including Norway and Switzerland leaving the famous British Airways trailing in third place (Anderson, 2014). In conclusion, the use of Ansoff Matrix can sometimes result in an overuse of analysis. The business should, therefore, make sure that they dont fall victim of circumstances to problems caused by over planning (Friedman, and Miles, 2006). Corporate Social Responsibility (CSR) CSR is a management model in which organizations or companies incorporate social and environmental involvements in their business operations and relations with their stakeholders. The concept of CSR has continued to play a fundamental role in an organizations development strategies. It can be used to generate a competitive advantage for the firm if used to achieve the objective mentioned. The business will also succeed in creating a strong commercial image that will eventually increase the turnover figures. If a company seeks to acquire greater heavens of competitiveness and improved future returns, CSR is necessary. Organizations should implement the agenda with an objective of adding value to the business besides satiating social obligations. CSR activities should be unique in format, and address the social concerns in that particular setup: should not emulate other organizations activities for the sake of fitting in.(McDonald, and Meldrum, 2007). According to EasyJet management board, the passengers and the people are the vital business organs. The quality delivery of customer services depends on motivation and connections with different people. The organization also places safety as the highest consideration and continuously improves customer service. The customer Board ensures the success of this process and this year a number of few initiatives are developed to help improve the performance. A culture change program has been adopted involving the people to ensure excellent delivery of customer service (Anon, 2015). It is also the responsibility of airlines to minimize the problem caused to the environment. At Easy Jet, this is done in a number of ways. The industry’s most significant effect is through carbon four oxide emissions. The simplicity, efficient operations and young fleet of Easy Jet has made its passengers carbon footprint to be twenty-two percent less than a passenger who uses the same route but on a traditional aircraft. They are however still looking for other means to lower their emissions even further. The organization is also working hard to reduce the noise that is one of the major environmental issues. Easy Jet engages the local communities by supporting various community initiatives and different activities across their network (Olivas and Bondarouk, 2013). For example, Easy Jet links are felt around their headquarters Lutron where most of their employees come and have strong partnerships with the local communities to schools, local government, and local football teams. The primary objective is to help grow talents and help keep Easy Jet firm. To achieve this, well behaved, and honest persons who are capable of stepping into each other are considered. Stakeholders A Stakeholder in the case of the study is an employer, customer, staffs or a beneficiary of Easy Jet Company. The strategic decisions of corporations not only reflect on economic interests but also in the humanity agenda that circles around striking a delicate balance between the two sides. Porter and Kramer stated that there exists a relationship between prioritization and implementation of the two aspects that form the existence of the business. A strong relationship does exist between institutional strategy, human resource management, and the CSR in a wider dimension. For CSR success, the top-level management should be the driving force behind it because they can incorporate it into the corporation culture. The organization culture involves integrating corporate social responsibility into the mission, vision, and core values of the firm. When CSR is in these three dimensions that should be communicated to all the employees to ensure a shared understanding. It guarantees an involvement from the staff and managers as well as echoing the responsive mission to the society (Olivasand Bondarouk, 2013). Macro-Environment The macro environment is the primary external and uncontrollable factors that influence a business organizations design making and affect its general performance and strategy. These factors include political, social, economic and technological factors that can be analyzed using the pestle (Hatherly, 2013). PEST Analysis Initially, it is referred to a framework that is adopted to verify an organizations external environment. It stands for political, economic, social, technological and legal environment. But in other approaches like for the case of Easy Jet, some factors like the environment are removed thus reducing it to PEST. However, this variation is a minor issue, and an essential idea is to identify the critical factors from the entirely uncontrollable environment that might have an impact on the organization. Easy Jet takes an analysis by observing areas where the organization does not have any control, areas where it has some control and areas where it has full control. CSR shows that the Easy jet is moving above just running a business to maximize the profit. Employees benefits and some donations to the hospitals, schools and other organizations is a clear indication (McDonald and Meldrum, 2007). The working environment is of political, economic environmental, social and technological factors. All are not controlled by the business, but they have both positive and negative impact on business (Lavinsky, 2012). Political factors Political factors are mostly influenced by the taxation policy since Easy Jet get charged with landing in different countries. Also affecting them are the employment regulations, trade restrictions, tariffs and the government (Friedman, and Miles, 2006). There exists political criticism in countries like Germany that claims that Easy Jet doesn’t follow the Union law on compensation in cases of denied boarding delay or cancelation. Easy jet has developed a rule of refund within one week to avoid political criticism. Politics also criticized Easy Jet on environmental pollution, and it is offering to carbon offset the CO2 to the trips via a calculator (Jones, 2005). Economic factors It is persistently challenging as the prices keep on changing from one season to another. An increase in oil prices affects the overall profit. It results in an envious amount of money the company invests to improve in their airlines or to give back to the society ( McDonald, and Meldrum, 2007). To improve its economy, Easy Jet has entered commercial agreements with Transaero Airline where it acquires the right to sell certain number of seats to Easy Jet LGW-DME route (Jones, 2005). Easy Jet has focused on operating slowly on a greater variety of holiday destinations to boost its economy and help it compete Ryanair. It plans to purchase Airbus A320 and Boeing 757-200 to provide the capacity increase (Anderson, 2014). Social factor It focuses primarily on the airline safety, its passengers, and staffs. It attracts passengers to travel by Easy Jet next time if there are secured and safe flights. To achieve this, Easy Jet must depend heavily on internet as flights are checked and booked online. The internet service makes the customers be satisfied since the process is quick, convenient and simple. Easy Jet also has a beautiful carrier attitude, and this commits staffs to perform excellently (Adelegan, and Radzewicz-Bak, 2009). To have a strong link with the passengers and the community, it has approved website trial involving putting different telephone reservations to help track success. It sponsored Luton Town F.C. since 2009 and also sponsored Manchester Pride in 2013 and 2014 (Anderson, 2014). Technological factor Technology plays a very vital role within Easy Jet as it relies heavily on it. However, as most of the things improve, technology also becomes affordable thus weakening the barriers to entry for competitors. It means that more competitors would join, and this might have a drastic effect on Easy Jet profit. The barriers to entry are always designed to prevent potential competitors from getting into the market profitably. It ensures that monopoly power is protected by the existing companies so that in the long run they venture in their supernormal profit. In addition, the blockages make the market less contestable. Some of the things that can act as barriers to entry get witnessed in the areas of research and development. They act as obstructions to potential entrants. It has also created the Airline TV that is doing much in promoting the airline.Easy Jet has also used a lot of technological slogans like “ The Web’s Favourite Airline” which is a reflection of the airlines cheerful image. Another widely used slogan is “Europe by Easy Jet.” Reference List Adelegan, O. and Radzewicz-Bak, B. (2009). What determines bond market development in Sub- Saharan Africa?. [Washington, D.C.]: International Monetary Fund. Anderson, T. (2014). EasyLand. Guildford, Surrey: Grosvenor House Publishing. Anon, (2015). [online] Available at: http://About us Corporate Responsibility [Accessed 8 May 2015]. Anon, (2015). [online] Available at: http://From Wikipedia, the free encyclopedia [Accessed 10 May 2015]. Blackshaw, T. and Crawford, G. (2009). The SAGE Dictionary of leisure studies. Los Angeles, Calif.: SAGE. 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